This Week's 5 Smartest Stock Moves
Nov 9th 2012 11:57AM
Updated Nov 9th 2012 12:02PM
If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. Zipcar finally learns how to drive
Zipcar (NAS: ZIP) has gotten its investors into a ditch, but Thursday night's report may be the first step out.
The leading car-sharing service posted strong third-quarter results. Revenue climbed 15% to $78.2 million and Zipcar saw its profitability explode fivefold to $0.10 a share. Analysts were only holding out for a profit of $0.01 a share on an 11% uptick in revenue.
Despite the competitive concerns, Zipcar is growing. There are now 767,000 members, 18% ahead of where the rental company that provides cars by the hour-- with gas and insurance included -- was a year ago.
After a report like this, naturally Zipcar is juicing up its revenue, earnings, and adjusted EBITDA guidance for all of 2012.
Zipcar has been a huge disappointment since going public at $18 last year. The stock hit a fresh all-time low of $5.90 on Wednesday, but this is the kind of report that may finally get Zipcar moving in the right direction.
Revenue surged 49% to $112.5 million. Analysts were only holding out for a 33% advance. Adjusted earnings climbed 58% to $0.87 a share, well ahead of the 29% spike that Wall Street was modeling. Sure, there was a one-time tax benefit in the mix, but earnings before taxes still soared 42%.
The report was solid all around, making SodaStream one of the few stocks to climb during Wednesday's market plunge.
However, the gain was well earned. Remember the naysayers saying that this was a passing fad? I wonder what they're thinking now that SodaStream had a 76% pop in soda flavor units. Yes, folks, SodaStream machines aren't collecting dust.
3. Netflix is still the feature attraction
Despite a year of miscues and heightened competition, Netflix (NAS: NFLX) is still the top dog when it comes to streaming.
According to Sandvine -- the provider of network policy control solutions that turned heads early last year in revealing that Netflix accounts for a third of the country's downstream traffic during peak prime time hours -- the video service hasn't lost its touch. Netflix is still accounting for 33% of the peak period downstream traffic. Hulu and Amazon Prime are at less than 2%.
So much for concerns that Netflix's market dominance was under attack.
4. The Whole truth
Whole Foods Market (NAS: WFM) continues to reward investors who chose organic over panic. The leading supermarket chain specializing in whole and natural groceries posted another strong quarter.
Sales rose 24% to $2.9 billion, propelled by an 8.5% spurt in comps.
Whole Foods Market has been consistently sporting healthy comps for several quarters now, showing that consumers are willing to pay up for quality organic food staples.
The market wasn't impressed by its cautious outlook, but investors should interpret the company's call to boost its quarterly dividend by 43% as a good sign about the future.
5. Fade to Mandarin
IMAX (NYS: IMAX) keeps getting its passport stamped.
The provider of supersize theater environments is expanding its revenue share agreement with Korea's largest multiplex operator. The broader deal will cover Korea's CJ CGV as it opens 15 new IMAX screens throughout China.
CJ CGV now has a commitment in place to open 65 IMAX theaters throughout South Korea and China.
China has become IMAX's largest market outside of the United States, and the international push is paying off. As stateside exhibitors are having a brutal year, IMAX's revenue and earnings are growing nicely.
By building out its network -- either through outright sales or revenue share agreements -- IMAX makes it easier for studios to justify going the IMAX route to deliver maximum revenue through premium screenings.
Well done, again, IMAX.
Keep it coming
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The article This Week's 5 Smartest Stock Moves originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz owns shares of Netflix and Zipcar. The Motley Fool owns shares of IMAX, Netflix, SodaStream, Whole Foods Market, and Zipcar. Motley Fool newsletter services recommend IMAX, Netflix, SodaStream, Whole Foods Market, and Zipcar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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